DOJ's $25 Million Crypto Forfeiture: Five Civil Complaints, Frozen Tether, No Defendants
DOJ’s $25 Million Crypto Forfeiture: Five Civil Complaints, Frozen Tether, No Defendants
On July 21, 2026, the U.S. Attorney’s Office for the District of Columbia filed five civil forfeiture complaints seeking more than $25 million in cryptocurrency that the government traces to alleged international investment, romance, and asset-recovery fraud schemes. The announcement credits the U.S. Secret Service Washington Field Office and its Cyber Fraud Task Force with tracing the funds through what the complaints describe as laundering networks operated from Southeast Asia, with IP addresses in China, Malaysia, and Cambodia. Not one complaint names a defendant. Every one of them proceeds against the cryptocurrency itself.
That is the story. The government did not indict anyone. It sued the money. Civil forfeiture has become the Justice Department’s working tool for transnational crypto fraud, and these five complaints show why: the alleged perpetrators are beyond arrest, but the funds passed through wallets and stablecoin ledgers the United States can reach. All five complaints are now on the public docket, and their allegations, examined below, show exactly how these cases are built and where they can be contested.
Why This Filing Reflects the Current Enforcement Model
The complaints are part of the Scam Center Strike Force, which U.S. Attorney Jeanine Ferris Pirro launched in November 2025 to target what the government describes as Southeast Asian scam compounds and the financial infrastructure that moves their proceeds. The Strike Force reports more than $800 million recovered in under nine months. Assistant U.S. Attorney Karen P. Seifert directs it, and the complaints are signed by prosecutors in the District of Columbia and the Western District of Washington.
The referral sources deserve as much attention as the numbers. One complaint began with a late-2024 referral from the Ontario Provincial Police. Another arrived from the United Kingdom’s National Crime Agency in January 2026. The other three grew from individual victim reports, including one made to a county police department in Maryland and one from the National Capital Region. Blockchain analytics firms, foreign law enforcement, local police, and exchanges now feed a steady referral pipeline into federal forfeiture practice. A wallet freeze can arrive more than a year before any public filing, and the holder often learns of the investigation only when the assets stop moving.
Criminal prosecution has not disappeared. When the government can reach the people it accuses, indictments follow, as they did against the chairman of Cambodia’s Prince Group in 2025. But an indictment against a defendant located in Cambodia produces a name on a docket and little else. A civil forfeiture complaint produces custody of the assets, a judgment, and a fund for victims. Expect this model to keep growing.
The Five Complaints
All five complaints are now public, docketed as Nos. 26-cv-2539 through 26-cv-2543. They share a template. Each is verified by a Secret Service or FBI agent under penalty of perjury. Each pleads the same two forfeiture counts: proceeds of wire fraud under § 981(a)(1)(C) and property involved in money laundering under § 981(a)(1)(A). Each targets USDT that Tether, the stablecoin’s issuer, froze voluntarily at law enforcement’s request. None names a defendant.
Together the complaints describe the scheme the government calls cryptocurrency investment fraud, or pig butchering, along with alleged offshoots: task schemes, approval phishing, and fee-based recovery fraud. The Treasury Department’s FinCEN described the core pattern in a 2023 alert to financial institutions, and per Internet Crime Complaint Center data cited in the complaints, the scheme drew more than 61,500 complaints and $7.2 billion in reported losses in 2025 alone.
United States v. Approximately 1,766,583 USDT, No. 26-cv-2540: The MicMarkets Platform
The FBI’s complaint targets four Tether addresses holding $1,766,583 in USDT. According to the complaint, the scheme began with a dating app. In June 2024, the first victim met a man calling himself Ambrose Andersson, a claimed dual Swedish-American citizen who spoke five languages and ran his own analyst group in Cincinnati. He moved the conversation to WhatsApp and directed the victim to “MicMarket FX,” a purported trading platform that displayed steady paper profits. The victim kept depositing. When the account froze in September 2024, the platform demanded more money to unfreeze it. The victim paid an additional $62,500, for a total alleged loss of $343,800. The account was never unfrozen.
The complaint identifies seventeen confirmed victims of the same platform. Another victim met “Leon Martin,” who sent a photo of a purported passport to establish trust, walked the victim through opening Coinbase and Crypto.com accounts, and supplied calculations on gold futures. The platform permitted small early withdrawals, which the complaint calls inducement payments, before demanding prepaid taxes on any larger withdrawal. Martin offered to pay half. That victim’s final deposit was 65.5 ether, about $159,000.
The tracing tells the rest. Per the complaint, each victim deposited into a unique, unattributable address shared with no one else, which the government calls a “0 Level” address. Funds then moved rapidly between wallets, crossed the THORchain bridge from bitcoin into USDT on the Ethereum blockchain, and pooled in consolidation addresses alongside funds from unknown sources. The complaint’s own tracing table concedes the limits of that exercise. Of the $1,766,583 frozen, $1,164,755, or 65.9 percent, is attributed to confirmed victims. By address, the attributed share runs from 41.5 percent to 77.9 percent. The government seeks the entire balance anyway, on the theory that the commingled remainder is property involved in money laundering under § 981(a)(1)(A). Tether froze all four addresses at the FBI’s request in November 2024, twenty months before the complaint was filed.
United States v. Approximately 2,389,778.77 USDT, No. 26-cv-2539: The Zoomex Spoof
The Secret Service complaint targets six addresses holding $2,389,778.77 in USDT and traces more than 99 percent of it to two victims. In March 2025, a Montgomery County, Maryland resident reported to county police that he had sent millions of dollars in cryptocurrency to what he believed was the exchange Zoomex. He had actually sent it to zoomex-net.com and zoomex-pay.com, which the complaint alleges were spoof sites built to mimic the legitimate exchange’s real domain.
The complaint reconstructs the alleged scheme from WhatsApp records spanning November 2024 through April 2025. A woman calling herself Angelina Kovalonka introduced the victim to her “financial advisor,” Ronald Hanson, who ran a group chat, issued trading signals, and pressed the victim to commit larger sums quickly. One quoted message promised a return of $1.5 million to $2 million by month’s end and claimed Hanson’s investors had made over $12 million in ten days. The victim converted his savings, plus funds wired by a friend, into roughly 2,126 ether worth about $5.25 million and sent it to addresses the Subjects supplied. When the two men tried to withdraw, their accounts were “locked” and the platform demanded miners’ fees to release them.
The alleged laundering path ran through intermediary wallets, then through Tokenlon, a decentralized exchange that requires no customer identification, where the ether was swapped for USDT and moved to six unhosted addresses. Tether froze the addresses in July 2025, one day after the Secret Service asked. A footnote discloses that the government traced the funds using the last-in-first-out method. The disclosure will be litigated. No court has settled which accounting convention governs commingled cryptocurrency, and the choice of method changes which coins count as proceeds.
The complaint closes with a lesson for anyone with an interest in frozen funds. In September 2025, a person using a Gmail account contacted Tether, then emailed the Secret Service directly, asserting ownership of the frozen addresses and asking how to unfreeze them. Agents requested a name, address, passport number, and the source of the funds. The response supplied a name and an address in China. The email account was registered under a different name, and the associated phone and IP addresses traced to Malaysia. Ten months later, the complaint alleges, no verified proof of ownership has arrived. The inconsistencies are now pleaded in the government’s case. An email to an exchange or an agency is not a claim. Only a verified claim under Rule G puts ownership before the court, and everything said informally beforehand becomes evidence.
United States v. Approximately 10,404,905 USDT, No. 26-cv-2542: The $78 Million Network
The largest complaint began with a late-2024 referral from the Ontario Provincial Police, which had been investigating approval phishing. In that variant, the source code of a fraudulent website carries a malicious approval value; once a visitor connects a wallet, a smart contract can drain it. The same value recurred across websites dating back to 2020, which the government says ties the sites to common operators. From that lead, the Secret Service identified at least 243 confirmed or suspected victim transactions into 82 initial deposit addresses, and those addresses took in more than $78 million between January 2023 and July 2026, roughly $46 million of it through Coinbase. Tether blocklisted the three subject addresses, along with sixteen others, in about January 2025.
The victim interviews describe several distinct schemes. Alleged task and employment schemes paid small “commissions” for product reviews, then used negative-balance mechanics to prompt ever-larger deposits. Alleged romance and investment schemes ran through platforms named BitaGold, SteemFly, Smart Labs, and Bdswg.com. Another alleged scheme recalled payments made through the Bovada and MatchPay systems after the victim had already given value. Each variant, as pleaded, used the same hook: a small early payout, then escalating fees and taxes to withdraw. Messages from one alleged participant, attached to the complaint as an exhibit, claim he was working under coercion inside a Cambodian compound.
The tracing math is the complaint’s most consequential feature. Of the $10,404,905 frozen across three addresses, the government back-traced roughly $1.13 million, about 11 percent, to identified victim transactions. The bridge to the rest is an inference the complaint states plainly: in the government’s experience, money launderers do not commingle clean funds with stolen funds, so the common consolidation addresses linking all three subject addresses mark them as the property of a single operator group, and the untraced balance is either proceeds from unidentified victims or property involved in laundering. That inference carries roughly $9.3 million of the amount sought. The complaint also notes that more than a year after the freeze, no one has inquired about the frozen addresses.
United States v. Approximately 284,903.78 USDT, No. 26-cv-2541: The Recovery Fraud
The smallest complaint alleges a two-stage fraud, and it arrived through the United Kingdom’s National Crime Agency in January 2026. According to the complaint, a British victim sent more than £2 million to a purported investment firm called Apex Financial beginning in 2023, then paid roughly £1.7 million more in fabricated fees chasing phantom gains of £12 million. When the victim recognized the fraud, the complaint alleges, a second wave began. The subjects impersonated a senior NCA official. They impersonated CatLabs, a legitimate asset-recovery firm, including through a U.S.-citizen persona. They impersonated HMRC, the British tax authority, and produced fabricated tax correspondence demanding payments to release funds supposedly frozen in a Wise account. A second victim, who lost about £12,000, was contacted from the same email address.
Between October 2025 and January 2026, the victim sent about 3.2 million USDT from his Coinbase account to two deposit addresses supplied by the subjects. One of those addresses was 99.998 percent funded by this single victim, which lets the government attribute everything flowing out of it to him. The frozen $284,903.78 sits in two addresses: one funded through a three-hop chain executed within about an hour on December 30, 2025, the other by five transfers over eight days in January 2026 that make up its entire balance. Know-your-customer records from foreign virtual asset service providers along the route place the account holders in Georgia and Armenia. The complaint treats the gas fees and rapid hops as laundering evidence in themselves, on the premise that no legitimate business pays to move money in circles. Whether that premise holds for any particular holder is a question for litigation.
United States v. Approximately 1,230,899.74 USDT, No. 26-cv-2543: The Informal Claimants
The fifth complaint grew from a victim report in the National Capital Region, made after the operators of an allegedly fraudulent investment platform cut off contact when the victim attempted a withdrawal. Investigators traced the funds to six addresses, and Tether froze approximately 1,230,899.74 USDT on May 27, 2026, less than two months before the complaint was filed. In one of the six addresses, about 86 percent of the funds trace directly to the victim’s deposits.
What distinguishes this complaint is its account of the people who came asking before it was filed. One individual, using the alias “NoTwo,” inquired about the status of two frozen addresses, then backtracked, claiming to be communicating on behalf of friends who were not proficient in English. Another, writing under a Chinese-language alias, asked that a third address be unfrozen, stating that he had not participated in any illegal activity and had simply transferred the funds from another address he controlled. Investigators asked both for transaction histories, proof of the source of funds, and a legitimate business purpose. As of the filing, neither had produced the records. Their approaches, and their silence, are now allegations in the government’s complaint. A documented, properly presented claim might have fared differently. An undocumented one became evidence.
How Civil Forfeiture Works When No One Is Charged
A civil forfeiture action is an in rem proceeding. The government sues the property. The case caption names the coins rather than a person, and the court’s jurisdiction rests on the asset. No arrest is required. No conviction is required. The absence of any reachable defendant is the reason the tool exists.
The substantive authority is 18 U.S.C. § 981, and all five complaints plead the same two counts. Count one, under § 981(a)(1)(C), reaches property constituting or traceable to proceeds of specified unlawful activity. The pleaded predicates are wire fraud under 18 U.S.C. § 1343 and wire fraud conspiracy under § 1349, on the theory that each platform message and website transmission was a wire in furtherance of a scheme to defraud. Count two, under § 981(a)(1)(A), reaches property involved in money laundering transactions. There the pleaded predicates are concealment money laundering and international money laundering under 18 U.S.C. § 1956(a)(1)(B)(i) and (a)(2)(B)(i), plus money laundering conspiracy under § 1956(h).
No person is charged with any of those offenses. In a civil forfeiture complaint they function only as predicates that make the property forfeitable, and the pairing of the two counts is deliberate. The proceeds count covers the funds traced to victims. The laundering count sweeps the commingled remainder the tracing cannot attribute, because property “involved in” a laundering transaction need not itself be proceeds. That is why every complaint dwells on uneconomic transaction patterns, wasted gas fees, single-victim deposit addresses, and rapid hops. Those allegations establish concealment, and concealment is what converts an untraced balance into forfeitable property.
The five complaints also expose the operational core of these cases. The United States had not taken custody of the USDT in any of them when it filed. Tether, the stablecoin’s issuer, blacklisted the addresses voluntarily at law enforcement’s request, in one case within a day, and in another, nineteen addresses at once. Venue in the District of Columbia rests on Tether’s control of the tokens from its domicile in El Salvador, which places the property outside the United States under 28 U.S.C. § 1355(b)(2). The money stopped moving because a centralized issuer froze it; no seizure warrant was required. That power exists because USDT is administered by a company, and it has no equivalent for bitcoin held in a private wallet.
The Civil Asset Forfeiture Reform Act sets the ground rules. Under 18 U.S.C. § 983(c), the government bears the burden of proving forfeitability by a preponderance of the evidence. Where the theory is that property facilitated a crime, the government must show a substantial connection between the property and the offense. That is a real burden, and in crypto cases it is carried almost entirely by blockchain tracing.
Procedure runs through Rule G of the Supplemental Rules. The government files a verified complaint, sends direct notice to known potential claimants, and publishes notice, typically on forfeiture.gov, the government’s official forfeiture notice site. Anyone asserting an interest must file a verified claim by the deadline in the notice, generally at least 35 days after direct notice is sent, or within 60 days after the first day of publication if no direct notice arrived. An answer or motion is due 21 days after the claim. Miss the deadline and the government moves for default. In cases like these, where the government contends the true owners are overseas and will never appear, default judgment is the expected endgame for most of the money.
Two more doctrines shape these cases. Under the fugitive disentitlement statute, 28 U.S.C. § 2466, a claimant who evades U.S. criminal prosecution can be barred from contesting the civil forfeiture at all. And for funds held in accounts at financial institutions, 18 U.S.C. § 984 lets the government forfeit identical fungible property found in the same account without strict tracing, if it files within one year. Whether § 984 applies to cryptocurrency held at exchanges remains unsettled, and it is a live fight in this docket.
When the alleged perpetrators cannot be arrested, the government pursues what it can reach: the coins. Forfeiture supplies custody, judgment, and a victim fund without a single defendant in a courtroom, and the only litigation risk comes from whoever files a claim.
Who Has a Stake in These Cases
Three groups should read these filings closely.
First, holders whose assets were frozen. Tracing is imperfect, and the government’s own pleadings say so. The MicMarkets complaint attributes barely two-thirds of the frozen pool to confirmed victims and seeks the rest as commingled laundering property. Clustering heuristics group addresses by inference. An over-the-counter trader, an exchange customer who sold coins for cash, or a business that accepted crypto payments can find its assets inside a frozen wallet cluster without any connection to the alleged fraud. Those holders have standing to file claims, and CAFRA gives them an innocent owner defense under § 983(d). The defense must be proven by a preponderance, and it turns on knowledge: what the claimant knew about the funds, and what a bona fide purchaser paid and understood.
Second, victims. Forfeited funds do not go to victims automatically. After forfeiture, victims may petition for remission under 28 C.F.R. Part 9, the Justice Department’s administrative process for returning forfeited assets to people who suffered pecuniary loss from the underlying offense. The petition requires documentation of the loss, and recovery is typically pro rata when the fund cannot cover everyone. The MicMarkets complaint states that additional suspected victims have not yet responded to law enforcement, and the Secret Service has asked victims of these schemes to come forward through its field offices. Identified, documented victims are the ones positioned to share in the eventual distribution.
Third, intermediaries. Every complaint like this generates subpoenas to exchanges, payment processors, and OTC desks whose platforms touched the funds. The complaints already name the on-ramps and swap services the funds traversed, and one alleges a deliberate exchange-layering step through accounts funded at Binance and BTSE. Some of those recipients become witnesses. Some become subjects of the parallel criminal investigations, which the government says are ongoing. A freeze on a customer’s account is frequently the first visible sign of a laundering investigation that will later produce charges.
Where the Fight Is in a Crypto Forfeiture Case
The government’s case is a tracing exercise, and tracing is contestable. Blockchain analytics assign addresses to owners through clustering assumptions. Attribution of a wallet to an alleged fraud network is the government’s inference, and it must survive discovery. When victim funds are commingled with other funds across intermediary addresses, the accounting method matters: first-in-first-out, last-in-first-out, and pro rata approaches produce different answers about which coins are proceeds, and courts have not settled on one. The complaints put the pressure points on display. Several disclose that their tracing used LIFO. The MicMarkets complaint concedes that only 65.9 percent of the frozen balance is attributed to confirmed victims and pursues the remainder as laundering property. The $10.4 million network complaint back-traces about 11 percent of the frozen funds and reaches the other 89 percent through an inference that launderers do not mix clean money with illicit money. That inference is an evidentiary proposition the government must defend, and it is exactly where a particularity challenge under Rule G(2)(f) or an innocent owner defense would concentrate. A claimant who can show independent, documented sources for assets in the untraced remainder attacks the complaint at its foundation.
The knowledge fight matters just as much. The innocent owner defense rises or falls on what the claimant knew and when. Records of ordinary commerce, market-rate transactions, compliance screening, and prompt responses to red flags build that defense. Silence and delay destroy it. And because these civil cases run alongside open criminal investigations, everything a claimant files, verifies, and says in a deposition is available to prosecutors. The verified claim itself is a sworn statement. The Zoomex complaint shows the cost of a careless approach: the informal claimant’s mismatched identity details are now government allegations. Coordinating the civil claim with criminal exposure is the hardest judgment call in the case.
The complaints themselves map the defense landscape, sometimes unintentionally. The MicMarkets tracing table leaves as much as 58.5 percent of one address unattributed to any victim, and a holder with documented rights in that non-victim portion can argue the funds are neither proceeds under § 981(a)(1)(C) nor property involved in laundering under § 981(a)(1)(A). The LIFO convention is open to methodological challenge in every case. And potential claimants have already surfaced informally in at least two matters. Beyond the Zoomex claimant, the $1.23 million complaint recounts two approaches: one person who inquired about frozen addresses and then recast the inquiry as help for friends with limited English, and another who asked for an unfreeze, stating the funds were lawful transfers between his own addresses. Investigators asked both for transaction histories and source-of-funds records. Neither produced them, and about 86 percent of the address the second inquirer wanted unfrozen traces directly to the victim’s deposits. The pattern is now consistent across the docket. The government invites documentation early, and when none arrives, it pleads the silence.
Timing decides most of these cases. The claim window is measured in weeks, the verified claim carries criminal-case consequences, and the remission process rewards early, documented petitions. As former federal prosecutors, Scott Armstrong and Drew Bradylyons supervised the cryptocurrency fraud and money laundering cases that generate forfeitures like these, including parallel civil and criminal enforcement. The firm’s cryptocurrency fraud and money laundering practice represents claimants, victims, and subpoena recipients on both sides of the forfeiture docket, and its cryptocurrency litigation practice represents international exchanges in multimillion-dollar disputes over freezing actions, international traders whose wallets have been frozen, and innocent parties whose cryptocurrency was frozen in actions aimed at others.
Frequently Asked Questions
What is civil forfeiture, and how does it differ from criminal forfeiture?
Civil forfeiture is an in rem lawsuit against property. The government alleges that the asset itself is proceeds of crime or was involved in money laundering, and it names the property, not a person, as the defendant. The principal authority is 18 U.S.C. § 981. No arrest, indictment, or conviction is required, and the government’s burden is a preponderance of the evidence under 18 U.S.C. § 983(c), far below the criminal standard.
Criminal forfeiture is different in kind. It is an in personam penalty imposed as part of a sentence after conviction, under statutes such as 18 U.S.C. § 982, and it reaches only the convicted defendant’s interest in the property. That distinction explains the government’s choice in the July 2026 complaints. The alleged operators are overseas and beyond arrest, so criminal forfeiture is unavailable in practice. Civil forfeiture lets the government proceed against the traced cryptocurrency now and litigate against whoever appears to claim it, which in most transnational fraud cases is no one.
How does someone contest a federal civil forfeiture of cryptocurrency?
The process runs through Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. A person asserting an interest must file a verified claim in the district court identifying the property, identifying the claimant, and stating the nature of the interest. The deadline is set by the government’s notice: generally at least 35 days after direct notice is sent to a known potential claimant, or 60 days after the first day of publication on forfeiture.gov for everyone else. An answer or Rule 12 motion is due 21 days after the claim.
The claim establishes standing, and standing is contested early. The government may serve special interrogatories under Rule G(6) probing the claimant’s relationship to the asset before merits discovery begins. Informal approaches are not claims and carry real risk: in one July 2026 complaint, a person who emailed Tether and the Secret Service asserting ownership supplied identity details that did not match, and the government pleaded those inconsistencies into the complaint itself. In another, two individuals who inquired about frozen addresses but never produced requested transaction records saw their approaches, and their silence, pleaded the same way. The attorneys at Armstrong & Bradylyons PLLC handled forfeiture litigation as federal prosecutors, including parallel civil and criminal proceedings, and now represent claimants through exactly this sequence.
What is the innocent owner defense under CAFRA?
The Civil Asset Forfeiture Reform Act provides that an innocent owner’s interest shall not be forfeited. 18 U.S.C. § 983(d). The claimant bears the burden of proving innocent ownership by a preponderance of the evidence, and the statute splits into two tracks. An owner whose interest existed when the illegal conduct occurred must show either no knowledge of the conduct or that, upon learning of it, the owner did all that reasonably could be expected to stop the property’s illegal use. An owner who acquired the interest afterward must show a bona fide purchase for value without knowledge, or reason to know, that the property was subject to forfeiture.
In cryptocurrency cases the defense turns on documentation. Exchange records, transaction histories showing market-rate exchanges of value, source-of-funds evidence, and compliance screening all support the defense. It matters most for holders swept into freezes by commingling and clustering: OTC traders, exchange customers, and businesses that accepted crypto payments the government traces, fairly or not, to alleged fraud. The July 2026 complaints illustrate the exposure: the government attributes only 65.9 percent of the MicMarkets pool, and about 11 percent of the $10.4 million network pool, to traced victims, yet seeks the entire balance of each. Through its cryptocurrency litigation practice, Armstrong & Bradylyons represents innocent parties whose cryptocurrency has been frozen in actions aimed at others.
What happens when Tether freezes or blacklists a USDT wallet address?
Tether, the issuer of USDT, can blacklist any address at the token-contract level, which prevents the USDT there from moving. In the July 2026 cases, Tether froze every subject address voluntarily at law enforcement’s request, in one case within a day of contact and as long as twenty months before any complaint was filed. The holder typically learns of the freeze only when a transfer fails. During the gap between freeze and filing there is no docket, no notice, and no judge, yet the investigation is fully underway.
A freeze is not a forfeiture. Title remains unresolved until the government files an in rem complaint and the claim process under Rule G runs its course, with official notice published on forfeiture.gov. The July 2026 complaints show why the interim period is hazardous: statements made informally to Tether or to federal agents during a freeze were pleaded as allegations in three of the five cases. Armstrong & Bradylyons’s cryptocurrency litigation practice represents international exchanges in multimillion-dollar disputes over freezing actions and international traders responding to wallet freezes, both before and after a forfeiture complaint is filed.
Can international exchanges and traders challenge U.S. cryptocurrency freezing actions?
Yes. Standing to contest a federal civil forfeiture belongs to anyone with an interest in the property, and nothing in Rule G limits claims to U.S. persons. Foreign traders, market makers, and exchanges file verified claims in these actions, subject to the same deadlines and to standing discovery under Rule G(6). Two limits deserve attention. The fugitive disentitlement statute, 28 U.S.C. § 2466, can bar a claimant who is evading U.S. criminal prosecution, and venue under 28 U.S.C. § 1355(b)(2) lets the government litigate in the District of Columbia over property held by a foreign custodian, as it did with the Tether-controlled USDT in all five July 2026 complaints.
Exchanges occupy a distinct posture. A platform holding blacklisted customer assets faces custodial-interest questions, customer claims, and subpoena exposure in the parallel criminal investigations, all at once. Armstrong & Bradylyons represents international exchanges in multimillion-dollar disputes over freezing actions, and international traders whose wallets have been frozen, through its cryptocurrency litigation and crypto fraud and money laundering practices.
Can fraud victims recover money from forfeited cryptocurrency?
Yes, through remission. After property is forfeited, victims of the underlying offense may petition the Justice Department for a share of the forfeited funds under 28 C.F.R. Part 9. The process is administrative rather than judicial. A petition must document the victim’s pecuniary loss, and recoverable amounts are calculated on net loss. When the forfeited fund is smaller than total victim losses, distribution is pro rata.
In the July 2026 cases, the Secret Service has encouraged victims to come forward through its field offices and to file reports with IC3, and the MicMarkets complaint notes that suspected victims who never responded to law enforcement remain unconfirmed. Identified, documented victims are the ones positioned to participate when the forfeited funds are distributed. Remission petitions reward precision: complete transaction records, communications with the platform, and proof of the transfers all strengthen a petition. The firm has represented individuals in DOJ remission proceedings arising from major cryptocurrency fraud forfeitures, including the OneCoin distribution.
What is a cryptocurrency recovery scam?
A recovery scam targets people who have already been defrauded. The operators pose as asset-recovery services, law firms, blockchain investigators, or government agents, claim to have located the victim’s missing cryptocurrency, and request upfront fees, taxes, or deposits to release it. The money vanishes, and the victim is defrauded a second time. Victim lists circulate among fraud networks, so a first loss frequently invites the second approach.
The July 2026 complaint in United States v. Approximately 284,903.78 USDT alleges the scheme at full scale. After a British victim lost over £2 million to a purported investment firm, the complaint alleges, the subjects impersonated a senior official of the UK’s National Crime Agency, a legitimate recovery firm called CatLabs, and HMRC, complete with fabricated tax correspondence demanding payments to release funds supposedly frozen in a Wise account. The structure of legitimate recovery is different in every respect. Federal asset recovery runs through forfeiture and remission, government agencies do not charge victims fees to return seized funds, and official forfeiture notices are published on forfeiture.gov. Unsolicited contact promising recovery for a fee is the defining mark of the fraud.
What experience does Armstrong & Bradylyons PLLC bring to cryptocurrency forfeiture and freeze disputes?
Scott Armstrong served nearly a decade at DOJ’s Fraud Section, including as an Assistant Chief in the Market Integrity and Major Fraud Unit, where he supervised prosecutions involving cryptocurrency investment fraud, crypto Ponzi schemes, and digital asset schemes of the kind alleged in the July 2026 forfeiture complaints. He was lead trial counsel in the first cryptocurrency market manipulation case charged under Title 15, involving over $300 million in spoof and wash trades, and in a $650 million Ponzi prosecution tried to verdict. Drew Bradylyons served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney’s Office for the Eastern District of Virginia, where he supervised parallel criminal and civil enforcement, including forfeiture actions, and as an Assistant Chief in the Fraud Section.
The firm’s attorneys have over 25 years of combined DOJ experience and 25 federal jury trials. Through its cryptocurrency fraud and money laundering and cryptocurrency litigation practices, the firm represents forfeiture claimants, international exchanges in multimillion-dollar disputes over freezing actions, international traders responding to wallet freezes, innocent parties whose cryptocurrency has been frozen, fraud victims pursuing remission, and individuals and businesses drawn into the parallel criminal investigations these actions generate, in the District of Columbia and every other federal district.
Wallet Frozen, Assets Named in a Forfeiture Complaint, or Losses to Recover?
Armstrong & Bradylyons PLLC represents claimants contesting federal forfeiture actions, international exchanges and traders in disputes over freezing actions, victims pursuing DOJ remission, and individuals facing the criminal investigations that run alongside these cases. As former DOJ prosecutors, Scott Armstrong and Drew Bradylyons built and supervised the crypto fraud and laundering cases the government brings today.
